President Bakili Muluzi argued that he had outlawed all demonstrations relating to his bid to amend the constitution, which imposes a limit of two presidential terms, for the sake of "peace and stability".
" I am a good dictator who wants to maintain peace and stability in my country " President Muluzi
A High Court judge said on Monday that the presidential decree was unconstitutional, and that it was the president's duty to ensure that the police and the army protect demonstrators.
A two-third majority is required for the bill to be passed in Parliament, where President Muluzi's United Democratic Front (UDF) hold about 40% of seats.
President Muluzi said that the court ruling was "irresponsible and insensitive".
"I will instruct both the army and police that demonstrations should not take place," he said.
'Eruption of violence'
At a public rally outside the capital Lilongwe on Sunday, President Muluzi rejected allegations that he was a dictator for banning the demonstrations.
"If by ensuring that there is no chaos here, then indeed I am a dictator," he said.
" Wider views should be entertained " Judge Mwaungulu
"But the advantage with me is that I am a good dictator who wants to maintain peace and stability in my country."
On Monday, High Court Judge Dunstain Mwaungulu said that the president's decree was illegal, and that he was issuing an injunction against it.
"Because the issue is now in parliament, it is in the public domain, so wider views should be entertained," he said.
"There is likely to be eruption of violence as different people begin to express their opinion in a dramatic way, that is why organs of state, like police, should ensure maximum security for the demonstrators."
Amid the controversy, 20 students held a demonstration on Tuesday in the university town of Zomba, about 70km east of the economic capital Blantyre, where police reinforcements had been brought in.
The students carried anti-third term banners and chanted anti-government slogans, but armed officers prevented them from proceeding.
On Sunday, at least 50 members of the opposition National Democratic Alliance went into hiding in Zomba after skirmishes with suspected UDF youths.
One of the group, Wilfred Shaba, told the BBC's Raphael Tenthani from his hiding place that anyone seen sporting the purple ribbon, which has been adopted by the anti-third term campaign, was a target.
He said that neither the police nor the judiciary had been willing to investigate.
Members of Parliament started a debate on the issue on Friday, but are not expected to put it to a vote until July.
If the bill is passed, the constitution will be amended, allowing President Muluzi to run for a third term in 2004.
Our correspondent says that the present stand-off between the president and the judge is further evidence of the strained relationship between the ruling party and the judiciary.
In November last year, UDF members of parliament moved a motion to impeach Justice Mwaungulu and two other senior judges for being partial to the opposition.
Civil rights and Church groups, which oppose the amendment, are planning demonstrations in the country's cities and towns this Friday.
In contrast, the country's Muslim community has expressed support for the bill.